Solar REC demand in India jumps by 184% in Sep 2013
Sep 26, 2013 - Demand for solar renewable energy certificates (RECs) in India surged by 184% in September, a good sign for the solar sector, but prices remained at the floor, REConnect Energy Solutions Pvt said in a monthly update.
The consultant expects that bids for both solar and non-solar RECs would pick up soon as a number of states in India are introducing tougher compliance rules under the renewable purchase obligation (RPO), the mechanism that is driving REC demand. REConnect gave as an example a recent order by the government of Uttarakhand under which all obliged entities will have to meet their RPO shortfall for fiscal 2011/12 by mid-November 2013. Demand from Uttarakhand in the October trading session is anticipated at around 50,000 RECs.
Solar REC supply reached 50,000 units in September when compared to 30,000 in August. The clearing ratio on the Indian Energy Exchange (IEX) was about 15%, while its stood at only 6.56% on the Power Exchange India Ltd (PXIL). For a fourth month in a row solar REC prices remained at the bottom -- INR 9,300 (USD 149.3/EUR 110.4) on both exchanges.
Demand for non-solar REC was up 21%, while supply grew 16%. Nearly 3.45 million of non-solar RECs were available for sale during the September trading session. The clearing ratio was 1.65% on the IEX and 1.03% on the PXIL. For 14 months now prices are at the lower end of the set limit -- INR 1,500 per REC.
Under the REC scheme, companies producing renewable power in India but not taking advantage of the feed-in tariffs receive one REC per MWh generated. The RECs are traded on the last Wednesday of each month. Utilities and specific consumers are obliged under the RPO to purchase RECs to offset their carbon footprint.